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European Bank invests DM 57 million in hotel in Budapest
The Board of Directors of the European Bank for Reconstruction and Development today approved a DM 57 million (ECU 28 million) loan to a Hungarian company for the renovation of the Grand Hotel Royal in Budapest and the construction of office space and retail facilities.
The hotel, situated in the commercial and retail area of Pest, will be renovated and converted into a four star 380 room hotel, managed by Holiday Inn. Its historic facade will be preserved. It will include 25,000 square metres of new office space, 5,000 square metres of retail facilities and a 630 space underground parking facility.
The Hungarian company, Royal Beruhazo, is owned 50% by Sefri Construction, a development and construction management firm headquartered in Toronto, Canada; and 50% by Compagnie Générale de Bâtiment et de Construction (CBC), a subsidiary of the French conglomerate Compagnie Générale des Eaux. The International Finance Corporation is a co-lender in the project which totals DM 242 million (ECU 119 million). Commercial banks will be invited to participate.
"The investment will have the effect of finalising the privatization of one of the state-owned HungarHotels through the sale of the land and building", said Ron Freeman, the Bank's Vice-President in charge of Merchant Banking. "It will aid the tourism sector in helping to meet the high demand for quality hotel rooms and will mitigate the acute shortage of quality office space and parking in Budapest."
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